Thursday, March 09, 2017

A few excerpts from a note by Goldman Sachs economist Spencer Hill: February Payrolls Preview

We estimate that February nonfarm payrolls increased 215k in February, following +227k in January ... Reasons to expect a strong report include favorable weather effects, the strong hiring trends indicated in the ADP employment report, and a further drop in jobless claims to their lowest levels since the 1970s.

We estimate that the unemployment rate fell one tenth to 4.7% ... We also forecast average hourly earnings increased 0.3% month over month and 2.7% year over year, reflecting tightening labor markets and the continued impact of state-level minimum wage hikes.
...
February exhibited unseasonably warm weather and relatively limited snowfall, both of which are likely to boost payrolls in weather-sensitive industries. ... such a pattern is associated with strong growth in weather-sensitive industries, including construction, retail trade, and leisure and hospitality.

CR note: the consensus is for a 195k jobs added in February, and for the unemployment rate to decline to 4.7%.